Ever heard about the company who don’t want you to buy more of their products? Or the business who tried to become more sustainable by abolishing their sustainability department? This week, CSR Central focuses on a company who have taken a wildly innovative approach to corporate social responsibility: Patagonia Outdoor Clothing.
The story of Patagonia
Patagonia is an American company specialising in outdoor apparel. Trading since 1973, Patagonia effectively functions as a family business (they are still owned by their co-founders Yvon and Malinda Chouinard). For most of the firm’s existence, they have been at the leading edge of efforts to steer the clothing industry in a more sustainable direction.
For over 30 years, Patagonia has donated 1% of their annual sales to environmental charities and grassroots organisations. The company view these contributions, not as some arbitrary form of corporate philanthropy, but as one of their standard costs of doing business and something that is as much a core element of Patagonia as selling shirts and jackets.
Neither has Patagonia been content merely ensuring that their own operations are run sustainably. In 2010, they helped found the Sustainable Apparel Coalition, an alliance of 30 companies from the clothing and footwear industries. The various members of this coalition measure their environmental impact throughout their respective supply chains, benchmark their performances against each other, then publish the results in a social and environmental performance index. This index serves as a tool that clothing industry executives can use to make more sustainable decisions when sourcing materials and developing products.
Patagonia show a strong willingness to go beyond their company boundaries to find collaborators who they can work with on developing solutions to major sustainability issues. This can be seen in initiatives like $20 Million and Change, a Patagonia-backed fund set up to assist “like-minded, responsible start-up companies bring about positive benefit to the environment”.
They have also explored new business models that better embody their principles of sustainability and responsible growth. In 2012, Patagonia was one of the first Californian companies to become a registered ‘B Corporation’. This is a status that frees American companies from their legal requirement to deliver maximum returns for shareholders, releasing the firm to pursue a mission for the betterment of the environment or wider society.
A radical approach to CSR, Sustainability & Consumerism
In a surprising (and seemingly counter-intuitive) move last year, Patagonia announced the dissolution of their sustainability department. Rather than this being a regressive step, it actually signalled a deepening of Patagonia’s commitment to corporate responsibility and sustainable production.
In the words of Patagonia CEO Rick Ridgeway, the intention was to “integrate innovative sustainability thinking, values and goals into every employee” by making sustainability the responsibility of every member of staff in every department of the business. By freeing corporate social responsibility from the confines of the CSR & sustainability department, Patagonia gets every employee involved in reducing the environmental footprint of the company.
Perhaps the most high-profile of Patagonia’s initiatives has been their series of adverts insisting that consumers “Don’t Buy our Jackets”. These slyly subversive ads were placed to coincide with the annual consumer buying frenzy that is Black Friday. Patagonia’s ads were not driven by some wild impulse to commit commercial suicide, however; their anti-consumerist message was about persuading consumers not to buy more products than were absolutely necessary for their lifestyle – or for the environment. This message echoed the longstanding values of Patagonia and their adverts, rather than proving commercially disastrous, were far more likely to “strengthen the bonds with existing customers and make for curious new ones”.
Patagonia’s campaign against over-consumption is not without its critics. Karl-Johan Persson, CEO of the clothing multinational H&M, recently warned that dramatically cutting consumption of non-essential goods by 10 to 20 percent would have a catastrophic effect on economic growth and actually increase global poverty. Patagonia’s response has been to say that their sustainability ethos would make it hypocritical for them to work for environmental change without also asking consumers to pause for thought before they make a purchase. And at least Patagonia is trying to spark a debate around these issues and encourage their customers to consider the effects of their consumption.
Patagonia’s dedication to Ethical Consumption
The company’s commitment to eliminating unnecessary consumption encompasses efforts to extend the life of Patagonia products that customers have previously purchased. Customers are urged not to discard old Patagonia gear they’re no longer using, but instead bring them back to one of Patagonia’s stores. The customer is then issued credit to spend in Patagonia’s stores, while Patagonia then repair or recycle the exchanged gear. It all reflects the company’s oft-repeated dictum that “the greenest product is one that already exists”.
This scheme of exchange is part of what Patagonia describes as their “Common Threads Initiative”. When a customer signs a pledge and becomes a partner in the initiative, Patagonia make a promise that they will “make great stuff, fix it when it breaks, and recycle it when you’re done with it”. In return, they ask that the customer vow to “buy only what you need, repair it when it breaks, and recycle it when you’re through”. By making the customer part of a community in this way, the bond between company and customer is strengthened, the company is made to live the values it espouses, and the customer is committed to act – and consume – ethically.
Patagonia are undeniably a company who walk the walk when it comes to corporate social responsibility and sustainability. What makes their CSR programmes so effective is that they enrol their customers and get them to take action – whether through returning old goods or attending Patagonia swap meets across America.
Patagonia’s CSR & ‘Instinctive Marketing’
Their ethos of environmental conservation and corporate responsibility is seamlessly integrated into Patagonia’s marketing communications. It could be said that they engage in a form of ‘anti-marketing’; in creating advertisements that inveigh against over-consumption and hyper-consumerism.
Campaigns like “Don’t Buy Our Jackets” could also be characterised as ‘instinctive marketing’. This was a term developed by Mark Earls in his marketing tome, “Herd: how to change mass behaviour by harnessing our true nature”. Earls defines ‘instinctive marketing’ as “marketing that is based on your beliefs and your values”. It is a form of marketing that is “motivated by a passion to make people think differently about the world” as much as it is motivated by a requirement to generate sales and shift units. Whatever term you use to describe it, it is an approach to sustainability that has proved highly profitable: Patagonia has tripled its profits in the last five years and earned over $600 million in 2013.
We make this latter point not out of jaded cynicism, but to demonstrate that CSR can be commercially rewarding. Patagonia show this is possible. They achieve this because consumers recognise that their commitment to sustainability does not arise out of opportunism, but because Patagonia truly are a ‘belief-based business’ driven by an authentic purpose and unwavering values.